Coalition split over Cubbie sale

A CHINESE proposal to take over the nation's largest cotton farm has exposed rifts within the Coalition over foreign investment in agriculture.

Treasurer Wayne Swan last week approved a bid from Chinese textile company Shandong RuYi and Australian wool producer Lempriere to take over south-west Queensland's Cubbie Station.

After the approval, Coalition members set about voicing their support and opposition to the decision along internal party lines.

Prominent Liberals Joe Hockey and Christopher Pyne have expressed support for the proposal.

On Monday, Mr Pyne said he was "comfortable" with the decision of the Foreign Investment Review Board and Mr Swan.

But the Nationals' anger has been on display for all to see.

The party's federal leader Warren Truss and St George-based Senator Barnaby Joyce have railed against the proposal since it was announced on Friday.

"Treasurer Wayne Swan must explain why it is in the national interest for control of Australia's most valuable farm, along with its massive water rights, to be ceded to overseas owners," Mr Truss said.

The Coalition only weeks ago released a foreign investment discussion paper, which called for, among other things, a national foreign ownership register and lowering the threshold for FIRB approval to $15 million for agricultural land.

The current threshold is $244 million.

But while the federal Nationals have largely criticised the Cubbie proposal, the minor party does not have the numbers to mount an alternative policy without the approval of its majority Coalition partner.

The overall Coalition policy paper did not propose any major changes to the current foreign investment assessment system, which has remained largely the same since it was created in the 1970s.

Mr Truss has questioned the actual terms of the FIRB national interest test, just weeks after a Senate inquiry revealed there was no prescriptive test.

"As a privately listed company, the structure and ownership of Shandong RuYi is unknown and many questions remain about this deal. How will the management with the 20% Australian equity partners work in practice?" he said.

"Plans to review the conditions of the deal every 12 months appear empty. Exactly what will the government do if the buyers fail to comply with the proposed conditions?"

Mr Hockey responded saying the Nationals were "freelancing" in criticising the sale and did not speak for the Coalition.